May 2011 is Disability Insurance Awareness Month. While the insurance industry likes to increase awareness of purchasing disability insurance, medical professionals who long ago purchased disability insurance and have been paying premiums on disability policies for many years may opt to instead raise their awareness of the obstacles they are likely to encounter should they ever need to make a claim on their disability insurance policy. The article below by disability insurance attorney Edward O. Comitz provides some food for thought.
DISABILITY INSURANCE: CAN YOU COLLECT UNDER YOUR POLICY?
By: Edward O. Comitz, Esq.
You have practiced medicine for your entire career. Your spouse and children rely on you, and you have numerous financial obligations. The stress and trauma of a disability can cause you significant problems. To protect yourself in case of total or partial disability, you have purchased disability insurance.
Unfortunately, you suffer an injury or become so ill that you cannot continue your practice, and you then file a claim with your insurance agent. Of course, you expect it to be honored. Instead, shortly thereafter, you are contacted by an insurance adjuster, not your agent. Unlike your agent, the insurance adjuster is hostile; the questions he asks imply that you are malingering. You try to be cooperative, providing the insurance adjuster with the additional information he requests, but again your claim is denied. Adding insult to injury, you learn from the adjuster that the insurance company has secretly videotaped your activities and, based on the tapes, believes that you are not disabled at all. Dumbfounded by the insurance company’s response, you ask yourself if there is anything that you can do to make the insurance company pay the benefits it promised. The answer is yes.
Typically, the type of policy that medical and dental professionals purchase is what is known as an “own occupation policy.” Such policies provide compensation following a disability that prevents the insured (the person who purchased the policy) from performing the particular duties of his or her profession. Thus, the insured may be entitled to benefits even if he or she could in fact perform work of a different nature. For example, if a surgeon purchases an “own occupation policy” and severely injures his hand, but could nevertheless perform some or all of the duties of a general practitioner, the surgeon is considered disabled under an “own occupation policy” and entitled to benefits.
Disability provisions greatly vary in the language used, and coverage is often circumscribed and restricted by qualifying words and phrases. Accordingly, each policy of insurance must be individually reviewed to determine whether a particular claim is covered. What may appear to be an “own occupation policy” could in fact be an “occupational policy” if “total disability” is defined to include the insured’s inability to perform “all” duties or “every” duty pertaining to the insured’s occupation. In such a case, the insured may not be entitled to benefits if he or she can perform comparable employment for which the person is suited by education, experience and physical condition.
“Total disability” usually does not mean a state of absolute helplessness. Rather, it means that the insured is unable to perform the “substantial and material” acts necessary to carry out his or her profession in the customary and usual manner. That the insured performs, or is able to perform, some incidental duties connected with his or her usual employment typically does not preclude recovery of amounts due under the policy regardless of its wording.
Disability insurance carriers often deny benefits for subjectively diagnosed conditions, which include many mental conditions, insisting that the insured’s subjective symptoms do not provide objective, verifiable evidence of disability. In many cases, there is no provision or contractual requirement mandating that the insured provide objective evidence of disability. Therefore, from the insured’s perspective, these insurance companies are merely trying to save money by generously interpreting policy language in favor of claim termination. In addition, these companies appear to be taking advantage of flaws in medical science, which has not yet progressed to the point of creating methodologies for objectively testing and identifying certain conditions.
Notwithstanding the subjective nature of a particular condition, the insured may be able to secure or reinstate disability benefits with ample documentation and medical records supporting his or her diagnosis, including sufficient evidence that the insured is unable to work due to his or her symptoms and limitations. More recently issued disability insurance policies have significant limitations relating to “subjective” or “self-reported” illnesses. For example, these policies limit the duration of payment for psychiatric or psychological disorders, cutting off benefits after two or three years. Insureds often blindly accept their disability carrier’s decision to deny or limit benefits based on such conditions without considering numerous relevant factors, including whether there are any physical aspects to the insured’s mental condition, whether the mental condition has a biological cause, or whether another, covered condition was the legal cause of the disability.
When making a claim for benefits under a disability policy, careful consideration should be given to the information that you provide to the insurance company, including any decision to submit to an “independent” medical exam. A coordinated effort should be undertaken, usually with the assistance of an attorney, in presenting your claim, providing subsequent information and, in many instances, detailing the law establishing your claim. This needs to be done in order for the insurance company to give your claim the consideration that it is due or, in some instances, to give the insurance company “enough rope to hang itself.” In other words, you can build your case against the insurance company by providing it with information that will prove that its denial was unreasonable, and thus a breach of the insurance agreement, and constitutes bad faith.
Anyone who purchases disability insurance may be faced with a situation where the insurance company refuses to honor its commitment. The insured can then either abandon his or her claim, even though he or she has paid premiums to the insurance company, or the insured can insist that the insurance company honor its legal obligations by filing a lawsuit seeking damages for breach of contract and bad faith. Insurance companies are vigilant in protecting their own interests, which often means not paying claims. Insureds may often need to be even more vigilant in protecting their own interests.
Edward O. Comitz, Esq. heads the Healthcare and Disability Insurance Practice Section at Comitz | Beethe and can be reached at (480) 998-7800 or by e-mail at firstname.lastname@example.org.